Quickstart     Cashflow File     Day     Participation     Other Financiers    Map     Oil Rights     Well Depths     Partnership     Dealmaker

  Shotgun Agreement     Running in the Red     Bankruptcy     Share Price     Corporate Position     Fast Track     Winning

  Leaving the Seminar  Hostile Areas  Subsidies  Joint Ventures  Administrator  Drilling Contractor  Rig Move Cost  Depletion

  Expiry of Rights  JV Leader  JV Drilling Decision    Posting Land    Waiving Extension Fees 

The Shotgun Approach to Deal Making...

Sometimes potential partners can be very close to a closing a deal, but neither wants to move from his or her "final" position. Some negotiators may write up a contract, sign it, and push it under their potential partner’s nose, and say, "Take it or leave it!"

While we all hope that financiers already have or will develop better negotiating techniques than the "take it or leave it" approach , this technique may be effective occasionally in this seminar.

However, too many of these kinds of agreements have their price. This price is mostly in administration: the administrator will be watching over many such agreements with very few of them likely to be accepted. As well, the potential partners, instead of negotiating, may counter with their own shotgun "agreements" further exacerbating the administrative duties. It’s not hard to imagine 10 to 20 shotgun agreements being needed to eventually drill one well if most financiers are using this approach as their primary negotiation technique.

It is feasible that the shotgun technique could jeopardize the financial ability of this site to offer these seminars. Besides, you are in this seminar to practice your negotiation skills, not just to win.

Therefore, this  rule minimizes shotgun agreements. If a dealmaker or a joint venture leader submits a deal or proposal to the administrator, and it is not accepted, it shall be assumed to be a "Shotgun Agreement." The penalties for a shotgun agreement are as follows:
  • First Offence: Put on probation until the end the of the seminar.
  • Second Offence: A fine of $10,000
  • Third Offence: A fine of $20,000
  • Fourth Offence: A fine of $40,000
  • A doubling of the fine for each shotgun deal thereafter.

To avoid fines, dealmakers and JV leaders should  negotiate the terms before submitting the agreement to the administrator.

And if you get a reputation for reneging on agreements―thus causing your dealmaker or JV leader to get a fine―you will find others not willing to deal with you.

 

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